Our members know that we are bullish longterm on Gold Futures.
However, there are a few signs which make us think of a bearish trend reversal. Fundamentally:
XAUUSD failed to end the week in positive territory by ignoring all positive fundamental data, including a rise in geopolitical tensions, inflation pressures and negative real interest rates. Most of the market players think that the gold price to be undervalued and expect a noticeable recovery in the second half of the year.
It looks like the investors throw positive fundamentals out as the U.S. economy, rising interest rates and a rising U.S. dollar continue to dominate the market.
However, even with falling DXY on Friday, gold was unable to sustain any price gains.
Traditionally, the gold market weakens in the summer. The market still has a few weeks more and this can push the prices lower for a while.
Technically:
As seen on the Daily Chart, during the rally, we saw a series of higher lows. At the recent selloff, we saw for the first time gold prices have traded to a lower low than the previous low different than other corrective periods since 2015.
Another signal is the death cross of EMAs as seen in the chart.
On the smaller chart timeframes:
XAUUSD Gold is under a strong bearish pressure. XAUUSD need to break above 1250 to continue its bullish move. And 1257 is the next and more important resistance.
The real problem will begin with the breakout of 1236 support. A strong bearish price action may take place targeting 1205 USD.
Personally, I do not believe Gold can break below 1200 USD. Gold Bulls will be waiting there. It's gonna be an interesting week. I won't be surprised if Gold hits 1226 USD this week.